Studying can be an exciting, yet stressful time. The last thing you want to worry about between exams and relationships are your finances! Ready to find a low rate, low fee product? Compare student cards right here!

What kind of credit card should students get?

A student credit card is an excellent way to manage spending and expenses. These cards sport low credit limits, so you cannot spend beyond your means or accumulate unpayable debt. To top it off, you can still reap all the benefits of being able to buy now and pay later.

What are the advantages of a student credit card?

These cards are bare-bones products that let you shop with funds from a lender and pay it off later. Not only will you learn how to better manage your finances, you’ll build up your credit rating: a ‘score’ that influences your eligibility for taking out certain financial products.

You’re unlikely to have access to significant rewards and benefits with a student credit card, but you won’t attract high fees and interest rates either. In short, it’s a basic credit product that suits a student’s needs: that’s all you need it to do!

If you’re not confident in your ability to pay off the balance each statement period, then you should consider a debit card instead.

What to look for in a student credit card

Look for a card that suits your spending habits. Don’t worry, it’s easy. Figure out how much you can afford to repay each bill, what interest rates and annual fees apply to your card, and whatever fees you may owe.

In particular, be wary of the following things:

  • Interest rates. Rates tend to be lower for student credit cards, so you don’t have to worry about the interest quickly compounding your debt. Just be sure to pay it off on time.
  • Introductory rates for purchases and cash advances. When you take out the card, the interest rates may be insignificant but may revert to a much higher rate at end of your first year. At that point, you can always shop around for a new card to keep saving!
  • An interest-free period (for purchases only). Pay off the balance within the interest-free period to avoid any accumulating debt. Simples!
  • Reasonably-priced fees. Aim for a card with cheap late payment fees, and a low or $0 annual fee. As per the interest rates, however, be sure to check if these fees are only cheap for the first year.
  • Stick to your limit. Many cards have a daily limit in the hundreds, and you should ensure that – whatever the figure – it’s something you’re comfortable paying back at the end of the statement period.

What to do if you’re a student in credit card debt

Credit cards are simple products; it’s the interest that confuses people. When you fail to pay off your balance at the end of each statement period, you’ll be charged interest. If month after month you find this keeps happening to you, consider it a wakeup call: you’re spending more than you should, and (potentially) causing damage to your credit rating.

On a happy note, you can reverse such damage and climb out of the hole of debt you’ve been digging. Many cards offer an interest-free balance transfer for up to 12 months. This will make it easier to pay off the previous balance of a card and get your finances back in order.  Just remember that any new purchases you make on that balance transfer card immediately attract interest, so be careful with it!

If a balance transfer isn’t an option for you, consider moving your debt into a personal loan with a lower interest rate than your credit card. Then, pay it off little by little.

How to apply for a student credit card

The criteria for getting a credit card are simple. Here are some of the more common eligibility rules:

  • You must be 18 years or older.
  • You must be a full-time, tertiary student.
  • You must be an Australian permanent resident or have the right to work in Australia.
  • You must not be bankrupt.
  • You may need a guarantor/co-signer (usually a parent or guardian) to apply.

You will also be asked to disclose your income (perhaps in the form of payslips), what you typically spend each month, information about any other loans or debt you’re currently encumbered with, and basic personal information (full name, address, etc.)

Are you enrolled in an accredited school and studying full time? Then take control of your finances and compare credit cards now!

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